By: Nick Clawson

Spuds Mackenzie was not without his share of controversies as the face of Bud Light from 1987 to 1989, but at least the “original party animal’s” antics never prompted Supreme Court intervention. Unfortunately, the same cannot be said for VIP Products (“VIP”) and their “Bad Spaniels” chew toy. The Supreme Court recently granted the petition for a writ of certiorari in Jack Daniel’s Properties, Inc. v VIP Products LLC, a case that will review the 9th Circuit’s application of one of trademark law’s most well-known cases. The outcome at the nation’s highest court next year could result in an expansion of the fair use defense in trademark infringement cases, as well as new challenges for trademark owners moving forward.

VIP Products, a manufacturer of dog toys, sells a plastic squeak toy that resembles a bottle of Jack Daniel’s Old No. 7 Black Label Tennessee Whiskey. VIP’s “Bad Spaniels” toy incorporates dog puns and “poop humor” to distinguish the two products, as depicted below. Per court filings, the dog toy also comes with a tag stating that the product is “not affiliated with the Jack Daniel Distillery” (not pictured). 

After receiving a cease-and-desist letter from Jack Daniel’s in 2014, VIP filed the present action, seeking declaratory judgment that the dog toy did not infringe upon or dilute the distiller’s trademark. VIP alleged that the dog toy constituted both nominative and First Amendment fair use. While differing slightly in application and analysis, both would provide an affirmative defense to an infringement claim.

Nominative fair use involves a party’s use of a trademark in a descriptive manner to refer to the trademark and its associated goods or services. The Ninth Circuit Court of Appeals outlined the requirements for the nominative fair use defense in the 1992 case New Kids on the Block v. News America Publishing, Inc., which would allow VIP to avoid liability for infringing use of an identical trademark if they could demonstrate each of the following: (1) the product is difficult to describe or identify without using the trademark; (2) the use of the trademark is limited to the amount necessary to identify the product; and (3) nothing about the use of the trademark could suggest endorsement or sponsorship by the holder of the trademark. Such a nominative use would, by definition, not dilute the distiller’s trademark. 

First Amendment fair use, as applied to trademarks, protects the right of an alleged infringer to use a trademark (or, often, a humorous variation thereof) for creative expression. While courts generally grant greater latitude when the use is purely creative, the Ninth Circuit notes in this case that parodying a trademark for a commercial product is not inherently dispositive. Courts generally review the case facts to determine whether (1) the use is actual parody, and (2) whether the use is likely to cause confusion for consumers. Whether the mark is diluted would depend upon the outcome of this second factor–if the likelihood of confusion is low, a trademark is less likely to be diluted by the parodic use.

The district court rejected both of VIP’s fair use defenses. First, the district court held that, because VIP did not use the identical Jack Daniel trademark or trade dress in its toy, it could not be considered nominative fair use. Second, the district court held that VIP could not receive First Amendment fair use protections because the manufacturer used Jack Daniel’s distinctive trade dress to promote a commercial product, which traditionally weighs against a finding of fair use. Furthermore, the district court found that the distiller’s brand had been tarnished by the squeaky look-alike and granted partial summary judgment to Jack Daniel’s.

The Ninth Circuit Court of Appeals, however, viewed two of VIP’s arguments much more favorably. While affirming the lower court’s holding regarding nominative fair use (reiterating that nominative fair use defense did not apply where a mark was “not identical”), the circuit court held that the dog toy constituted an expressive work deserving of First Amendment fair use protections. To reach this conclusion, the Ninth Circuit attempted to balance artistic expression with trademark rights utilizing several precedential tests. First, the Lanham Act, which governs trademarks at the Federal level, imposes liability upon those who create a likelihood of confusion with a valid, protectable trademark. The court notes, however, that this test fails to fully account for the public’s interest in free expression and thus is only applicable when the plaintiff can establish one of the two requirements set forth in Rogers v Grimaldi—a landmark trademark case from 1989 out of the Second Circuit Court of Appeals. In the Ninth Circuit, the Rogers test requires the plaintiff to show that the defendant’s use of the mark is either (1) not artistically relevant to the underlying work or (2) explicitly misleads consumers as to the source or content of the work. 

The Ninth Circuit held that the VIP’s chew toy, while “not the equivalent of the Mona Lisa,” did constitute artistic expression, commenting on corporations (like Jack Daniel’s) that take themselves and their brand “too seriously.” The court further held that, because VIP’s chew toys conveyed an artistic expression, its use of the Jack Daniel’s trade dress did more than propose a commercial transaction, making the use noncommercial overall. Therefore, the use did not dilute the distiller’s trademark. The circuit court remanded the case back to the lower court for a determination of whether Jack Daniel’s could satisfy either prong of the Rogers test. Jack Daniel’s appealed this decision.

Next term, the Supreme Court will take on two questions arising from this decision: 

(1) Whether humorous use of another’s trademark as one’s own on a commercial product is subject to the Lanham Act’s traditional likelihood-of-confusion analysis, 15 U.S.C. § 1125(a)(1), or instead receives heightened First Amendment protection from trademark-infringement claims; and 

(2) whether humorous use of another’s mark as one’s own on a commercial product is “noncommercial” and thus bars as a matter of law a claim of dilution by tarnishment under the Trademark Dilution Revision Act, 15 U.S.C. § 1125(c)(3)(C).

The answer to the first question will hinge upon the Ninth Circuit’s holding that VIP’s dog toy constituted artistic expression. While it may sound bizarre, it is supported, albeit indirectly, by a 2007 decision out of the Fourth Circuit Court of Appeals—Louis Vuitton Malletier S.A. v. Haute Diggity Dog, LLC.  The defendant in this case produced a line of dog toys based on the famous luxury brand’s name and logo (aptly named “Chewy Vuiton”). The Fourth Circuit held that the toys constituted a successful parody that was similar to, yet clearly distinct from, the registered mark. Given the First Amendment protections granted to parody, the court then applied its own likelihood of confusion test (the Pizzeria Uno test, analogous to the Rogers test), holding that the factors substantially favored the dog toy manufacturer and that any likelihood of confusion was minimal. Furthermore, the court held that the toys did not dilute the fashion house’s mark by either dilution or tarnishment. Regarding dilution, the court noted that the similarities found in the toy were not close enough to destroy the parodic message in the product or lead consumers to believe that they were a source of Louis Vuitton merchandise. Regarding tarnishment, the court held that the fashion house had not provided any evidence that would support a finding that the dog toys had harmed their illustrious brand.

Several concerned parties have already filed amici curiae briefs in support of Jack Daniel’s, including the American Intellectual Property Law Association, the International Trademark Association, and the American Craft Spirits Association. Many note that the Rogers test has been historically limited to artistic works, and that its application to commercial products is misguided. Their concerns are certainly valid–if the Ninth Circuit’s approach is adopted in this case, trademark owners will likely have a more difficult time bringing infringement actions against parodies of their marks and trade dress. However, the circuit court’s approach does not appear to be so limiting as to grant potential infringers free reign over registered marks under the guise of protected parody. This case will likely be one in which the Supreme Court steps in to clarify and elaborate upon the various circuits courts’ decisions, rather than a major upheaval of trademark law and free speech protections.